Maybe you are describing that it is better to buy MARA on short term plays while the market is in a bull pattern. Which I don't disagree with. They are best able to churn out greater gross margin.Heineken-Ashi said:Valid argument. But MARA has more assets to offload in such an event should it need to raise capital. Significantly more, and growing. In a BTC bear market or huge price drop, you will get penalized most for the value of the BTC you own. If you don't own much, you will get hit hard, no matter your capability for future efficient operations.texagbeliever said:I think your point struggles with just one question: If BTC drops to $20k in value which stock will be more valuable? Now say instead it falls to $28k. Is that high enough or will creditors start calling out of fear of a further drop?Heineken-Ashi said:
Regarding BTC miners, saw this article today. It seems well researched and well reasoned. And you are supposed to come away with the conclusion that RIOT will be better than MARA moving forward.
Better Bitcoin Mining Stock: Riot or Marathon? (yahoo.com)
Now for what the author either doesn't know, or purposely left out.
If RIOTs actual cost to mine each btc is $2K, how did they lose $50M last quarter when BTC averaged $37K? Because they offset the energy credits against the mining costs to come up with $2K. But while shutting down mining to generate credits, they added absolutely 0 BTC to their HODL. So what good is cheap mining if you aren't keeping any BTC in a bull market?
MARA doesn't have the cheapest costs per BTC mined, but they constantly add to their market leading HODL and are constantly adding mining exposure in different parts of the world to diversify their cost exposure. RIOT on the other hand is a part time miner who shuts down from time to time to be able to offset their costs while not adding much to their HODL.
In this bull market, I want the miner with the best combination of strong balance sheet, best mining capabilities, most efficient mining capabilities, and least risk. MARA is that. RIOT is the most efficient, but it doesn't lead to a better balance sheet as they aren't effectively growing their assets in a bull market.
MARA has diversified but that means they have also aggressively created more exposure with higher costs. Meanwhile RIOT has a more sustainable long term approach to cornering the BTC market. If BTC were to take a significant dip, credit will be called very quickly on BTC operations. The last significant dip caused many institutions to be burned when the value dried up and the bank / business was left holding the underwater asset.
And BTC mining is not a long term investible creature. I invest in miners during the bull runs and I get out as quick as I can before bear markets. These are not great companies that you pour money into and plan for long term growth. These are companies maximizing an opportunity that currently exists. The opportunity is thinning out by the second as each BTC mined gets closer to the final one. And with reward going down with every halving, your job is to add as much BTC to your balance sheet as quickly as possible. Because you will be valued based on the BTC in the future, not the method to extract it which will be gone. The costs are relevant, but not as relevant as the value of the coins which will swing wildly, but can ultimately only go up (If BTC holds and grows its adoption and value in public eye - if you dont believe BTC will stay relevant, then none of this should matter to you) due to the future of no new supply and constantly rising demand.
That said if the question was a buy and hold or in a the market dips who would you want to then own, I think that answer is RIOT. Now I wouldn't want to buy and hold a BTC stock for much of the point you laid out. I just think a reasonable case could be made that RIOT won't leave you holding an entirely empty bag but it still will be deflated.
The bold part, I'm not sure i follow. The less BTC you own when the price drops the less impacted you are because relative to your physical assets you should be less leveraged as a portfolio. Assuming the BTC is being used as credit against those assets. A liquidation sale would likely bring pennies on the dollar and you will have many hands wanting to make sure they get their money first. Which is why I would see them as being more leveraged and thus more risky.
